More than 500 employees of Allans Billy Hyde musical instrument stores will lose their job in the coming weeks after receivers for its parent company failed to find a buyer.

Australian Music Group Holdings, the owners of Allans Billy Hyde, will be shut down, according to receivers Ferrier Hodgson.

“The loss of jobs is disappointing, but we exhausted all avenues and there is no other way forward for this business,” said receiver Brendan Richards.

“These people have served music lovers and been a key part of the Australian music industry for generations. It is a sad day for live music in this country.”

Ferrier Hodgson said that 513 staff would be "made redundant over the next few weeks as the closure process comes to an end." The company has 27 stores and has already laid off 80 employees, while some staff have already resigned.

As of September 12, the company employed about 300 people in Victoria, 130 in New South Wales, less than 100 in Queensland and about 45 in South Australia, although those numbers would have declined since then. The company has about 25 employees in Western Australia.

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In September, the former co-director of AMG John Helme expressed hope that the company would find a private equity buyer.

At the time, market sources said Bain Capital, the private equity firm founded by the US presidential candidate Mitt Romney, was among potential buyers circling the group.

''A number of discussions are ongoing with interested parties,'' said Mr Helme.

But today's announcement confirms that those discussions have failed to save the historic music retailer.

In its statement, Ferrier Hodgson said "all stores are now in hard close-down mode, with a stock sell-out sale well underway.

The Melbourne-based company, which has roots dating back to the 1850s, was placed in administration in August after London-based majority shareholder Revere Capital refused to offer further financing for the business in the build-up to the Christmas season.